HINDUSTAN CONSTRUCTION

Hindustan Construction Co-A Heady Mix Of Construction & Reality

For the year ended March 31, 2008, HCC posted Rs 30.82 billion (US$700 million) in net turnover compared with Rs23.58 billion (US$540 million) the previous fiscal year. Profit after tax in the financial year increased to Rs1.09 billion (US$20 million) from Rs79 million (US$1.8 million) in 2006-07 on strong book orders and greater business diversifications across its existing areas of competencies.

Total order book on hand for 2007-08 is at Rs101.58 billion (US$2.32 billion) and the company is currently executing 36 projects across the country which includes the 4.6km Bandra Worli Sea-Link in Mumbai, Godavari Lift Irrigation Scheme in Andhra Pradesh and the Delhi Metro and Kudankulam Breakwater in Tamilnadu.

In July 2008, HCC bagged a national highway project at Badarpur worth Rs3.4 billion (US$80 million), near Delhi, which will give relief to inter-state movement on the Mathura Road. Year-to-date, HCC has built nearly 173 road bridges, over 45 dams, barrages and 15 powerhouses in the Indian sub-continent.

Total Order Book exceeds Rs 14000 crore giving immense visibility. With the expected positive outcome in favour of HCC in as far as the cost over-run of the Bandra-Worli Sea Lin, the corporate will report FY09 EPS in excess of Rs 8. The stock should see PE valuations rise to 10, giving the stock a 12 month target of Rs 80.
BUY.



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